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A Tale of Two Tax Jurisdictions:
Author(s) -
Galles Gary M.,
Sexton Robert L.
Publication year - 1998
Publication title -
american journal of economics and sociology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.199
H-Index - 38
eISSN - 1536-7150
pISSN - 0002-9246
DOI - 10.1111/j.1536-7150.1998.tb03263.x
Subject(s) - revenue , california proposition 13 , tax revenue , limiting , economics , ad valorem tax , property tax , tax reform , public economics , per capita , state (computer science) , value added tax , monetary economics , business , macroeconomics , finance , population , engineering , mechanical engineering , demography , algorithm , sociology , computer science
California's Proposition 13 and Massachusetts’Proposition 2½ attempted to shrink state and local tax burdens by reducing property taxes and limiting future tax growth. Both initially succeeded. However, following a brief lag, those governments made up lost revenues primarily through increased non‐tax fees and charges; within a decade, real per capita revenues and expenditures exceeded their pre‐tax revolt peaks. This development is consistent with the hypothesis that voter‐initiated limits on a subset of revenue sources, intended to reduce state and local tax burdens, succeed temporarily but are then undermined by expansions in other revenue sources.